The Big Myth: How American Business Taught Us to Loathe Government and Love the Free Market (2023)
Naomi Oreskes (1958) and Erik M. Conway (1965)
565 pages
By promoting a false dichotomy between laissez-faire capitalism and communist regimentation, market fundamentalists [have made] it difficult for Americans to have conversations about crucial issues, such as appropriate levels of taxation or the balance between federal and state authority, or even how to appraise the size of the federal government objectively. (118)
Truer words never spoken. Most anyone in the US who has ever brought up the pitfalls of free market capitalism or questioned its sustainability has likely had the conversation quickly shutdown by the comeback What, you prefer communism?, as if that constitutes the only conceivable alternative. And not just from free market fundamentalists: even many Americans who lament capitalism’s excesses have become convinced that trying to correct them will only lead us onto a slippery slope to a Soviet-style regime – nuance, and the half century plus lived experience of those in many European nations, be damned.
Historians Naomi Oreskes and Erik M. Conway, in their thought-provoking work The Big Myth: How American Business Taught Us to Loathe Government and Love the Free Market, provide a detailed analysis of how business leaders have worked aggressively and persistently for over a century to persuade Americans to believe this dichotomy, to accept that any loss of economic freedom will inevitably lead to a loss of political freedom. In their introduction, they make clear that it is this extreme view of free market fundamentalism that warrants concern:
We think what's at issue is not capitalism <i>per se</i>. Contemporary conservatives, libertarians, and market fundamentalists are not really defending capitalism, even if they think they are. They are defending a certain <i>idea</i> of capitalism, a vision of growth and innovation by unfettered markets where government just gets out of the way. ... To the extent that it once did (approximately) exist, it was a disaster: a world with little or no workplace safety, no constraints on pollution, no limits to the trees that could be cut down or the dangerous products that could be sold. (13)
The campaign by business to push through this fundamentalist view originated in the opening decades of the 20th century, according to the authors. It arose in response to a Progressive social and political movement born from the excesses of the Gilded Age of the late 1800’s, one that successfully lobbied for restrictions on child labor and the implementation of worker’s compensation. Business owners, looking to head off further such laws threatening their profits, banded together to plot ways to fight back.
A key early battle in this regard took place in the 1920’s, according to Oreskes and Conway, over the issue of rural electrification. Cities had largely been electrified by this point, but much of rural America had not, as private utilities found it unprofitable to build out the necessary infrastructure. When both the federal government and state governments tried to step in to fill the gap, however, these same utilities fought aggressively against it – opposing even plans that tried to strike a reasonable balance between public and private ownership. As a governor of that time who attempted to develop one such program lamented:
If the people of the United State ever turn to the nation-wide public ownership of electric utilities … it will be because the companies have driven them to it … [having] opposed and prevented reasonable and effective regulation by the States and the nation. (43)
Already in this period, the authors note, industry groups moved beyond just lobbying for or against specific legislation or promoting a particular business or industry. Instead, by targeting newspaper editors, educators, and the public directly, their “goal – expressed outright in numerous documents – was to change the way Americans thought about private property, capitalism, and regulation.” (51)
These early efforts by industry groups were often ham-handed, the authors note, and when the details eventually came to light a decade later during congressional hearings, it caused the business community significant embarrassment. Combined with the disastrous impact of the Great Depression, the revelations resulted in the political influence of business reaching a nadir during the 1930’s and early 1940’s.
Out of this period, however, arose a new, more politically savvy group of business owners who developed more refined approaches for pushing their agenda, their efforts focused on reversing the many aspects of the New Deal that undercut their profitability. Oreskes and Conway term the core message they propagated as the indivisibility thesis – a claim that political and economic freedom were intimately connected, and that “anything less than total business freedom was a step on the road to socialism or worse.” (118) Using these arguments, business groups rejected any regulation, any tax, any government involvement in the economy at all, thereby
transmogrify[ing] a self-serving argument for business privilege into a seemingly virtuous defense of cherished American values … [and] spend[ing] the ensuing decades bolstering its intellectual credentials and embedding it in the bedrock of American culture, to the point where the myth would be mistaken for age-old truth. (119)
Having established the central narrative that market fundamentalists sought to promote, the authors explore the many and varied approaches industry organizations and wealthy individuals pursued and funded to promote it throughout the mid-20th century. Having learned from the mistakes of earlier groups, their new methods tended focus on direct pressure, and more on using money to underwrite those who were either already pre-disposed to support the desired message or were in a sufficiently precarious financial situation that they would be willing to align their thinking with that of their patrons. This again involved working through educators and editors, but also included seeking out supportive preachers who could bring the message to their congregations, and sponsoring radio and TV programs that were little more than paid propaganda for business.
The extreme position free market fundamentalists staked out with the indivisibility thesis becomes clear through the ways in which they repeatedly had to curate reality to promote their message, editing out anything that could undermine it. Thus, for example, Oreskes and Conway note that even as market fundamentalists built up Adam Smith as the ur-capitalist, they also quietly excised his comments in The Wealth of Nations that supported government engagement in the economy, such as his argument that the financial industry needed regulation to achieve a durable and healthy capitalism.
Similarly, when market fundamentalists brought Austrian economics professor Friedrich von Hayek to the US to add academic rigor to their message based on his book
The Road to Serfdom, they ignored his calls in that text for a government social safety net, for example, and went so far, Oreskes and Conway point out, as to published an alternative version of the book that better aligned with their message. (Some years ago, I read Hayek’s
The Road to Serfdom, thinking I should get to know a text that so many conservatives have touted as undergirding their views. As can be found in my review (linked to at right), however, I was struck reading it by how Hayek, while clearly a believer in markets and capitalism, expressed the need for government assistance programs and explicitly distanced himself from conservatism.)
The authors also include a fascinating exploration of the multipronged media blitz undertaken by business leaders in the mid-20th century, through print, radio, and television. Here again, the details often force us to confront the history we had been taught in school or absorbed from cultural messages. Perhaps most shocking is the real story behind the The Little House on the Prairie series, relative to what appears in the novels and TV series. Striking too is the story of Ronald Reagan’s rise to fame as the spokesman on a series of TV shows sponsored by GE in the mid 1950’s to extol the virtues of business and free markets: Reagan’s views shifted strongly rightward, the authors note, as he aligned his thinking with that of his employers at GE, and a decade later he came to benefit politically from the significant public visibility he gained through the show.
Reagan, in fact, goes on to play a central role in the final portion of the book, as the time and money business associations and wealthy individuals spent spreading the gospel of the indivisibility thesis finally paid off during the final decades of the 20th century. By the 1970’s, the authors note, even Democrats spoke about the need for deregulation: when the authors write that an administration “pushed laws through Congress removing the New Deal-era price and service regulations from commercial air travel, trucking, and railroads … [and] target the nation’s vast energy sector for sweeping reform” (309) I found it surprising that they are talking about Jimmy Carter, and not Ronald Reagan.
In fact, however, the authors draw clear distinctions between the economic agendas of the Carter and Reagan administrations around rewriting regulations. They describe the Carter administration as pursuing necessary and careful deregulation for “the creation of competitive markets where they did not previously exist …[and] removing controls that were counterproductive or no longer justified” (331-332) in the interest of
enabling the economic growth necessary to pay for [quoting economist Alfred Kahn of the Carter administration] ‘continued progress in humanizing our society,’ but … not ... throwing workers (and consumers) to the wolves.
Reagan’s broad and sweeping deregulation approach, in contrast, focused on “aggressive de-unionization [and] the weakening of environmental, health, and safety statutes.” (331)
In Reagan, free market fundamentalist had created a true believer, who pursued deregulation aggressively; what he couldn’t accomplish in Congress in terms of deregulation, he achieved by starving regulatory agencies of funds. The authors note that
Reagan presented markets not merely as a place where people expressed their interests and satisfied their desires, but as the embodiment of freedom. … [Thus, he] proclaimed the solution to high oil prices was to let ‘freedom solve the problem through the magic of the marketplace.’ (357)
They document Reagan’s repeated use of this idea of the “magic” of the market in his speeches, and how this conceptualization allowed him to promise that free markets could solve any problem, without having to provide any supporting evidence – it was just magic.
The authors note that the reign of free-market fundamentalism has continued after Reagan, whether Democrats or Republicans have controlled government. It impacted, for example, both Clinton’s failed attempt to enact National Health Care, and his successful deregulation of the financial industry. And they document the destructive impacts that have resulted – in the Clinton examples, the former left tens of thousands of Americans uninsured, and the latter has been directly implicated in causing the Great Recession of 2008. As William Greider noted in One World, Ready or Not: The Manic Logic of Global Capitalism:
When law and social values retreated before the power of markets, then capitalism’s natural drive to maximiser returns had no internal governor to check its social behavior. When one enterprise took the low road to gain advantage, others would follow. (341)
This last part of the book, covering the past 50 or so years, is perhaps the most shocking part of the story. That business leaders in the mid-20th century aggressively tried to further increase their profits and power by tilting the social and political field in their favor is hardly surprising – although admittedly the full extent of their activities is discouragingly impressive. But, for readers who have lived through the events of the last half century, Oreskes and Conway tear away the veil put up by the free-market fundamentalists. It becomes like seeing behind the curtain in the Wizard of Oz – the statements once taken at face value about the “magic of the market,” or about what Adam Smith or Friedrich von Hayek wrote and argued for, or about the indivisibility of economic and political freedom, or so many other claims suddenly become so much unsupported propaganda.
Perhaps the most important take away from The Big Myth, however, is that understanding how the US has come to this point could enable us to recognize that, as Oreskes and Conway note:
Our choices are not confined to oppressive communism or heartless capitalism. To suggest that they are is a dangerous failure of vision. But that is precisely what market fundamentalism has achieved: it has blinded its adherents to the realities around them, while making it hard for all of us to see the range of options that have worked in the past and could work again in the future. (424)
By seeing behind the veil that has been draped around us for so long, perhaps we can finally find a path to a more economically sustainable economic system.
Other notes and information:
An engaging and wide-ranging interview of Naomi Oreskes by Brooke Gladstone for the program
On the Media can be found
here.
In a blog post from 2020, I comment on a fascinating discussion Krista Tippett had on her
On Being podcast with biological and evolutionary anthropologist AgustÃn Fuentes that ventured onto the topic of the societal implications of our current economic system.
Further quotes from William Greider’s
One World, Ready or Not: The Manic Logic of Global Capitalism can be found
here.
